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CALPERS, the California pension system that manages $280 billion in assets, came out this month with a policy position stating that directors can be "compromised" after serving 12 years on a board. A number of other observers agree with them. In France, as the Wall Street Journal noted in an article on this topic, directors lose their independent status after 12 years of service and are considered insiders after that point.

But others contend that long service on a board allows directors to more effectively understand the businesses that they oversee as well as stand up more effectively to long time managers. Regardless, having an effective board has never been more important. As investors become more active in their engagement with companies (as the boards and management of Valeant, Yahoo and United Continental are experiencing now) boards and executives need to be managing their organizations actively and effectively to stay ahead of the activists' demands. Sometimes these demands are appropriate (as they certainly seem to be in Valeant's case) and some times less so. But either way boards need to be on top of their game.

At iBoardrooms, we're here to help boards build great organizations. Whether large or small, for-profit or non-profit, boards need the right tools to succeed. Give us a try today and see how we can streamline your board's operations so you can focus on the key strategic issues that really matter.

Mar 25, 2016 5:02 am EDT
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